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Project: Cost Accounting
Cost Accounting : Project: Cost Accounting
Lesson 4 Overview
The purpose of this project is to give you practical experience with
financial computations and decision making in the cost accounting field.
In this project you’ll calculate and analyze costs in the role of a cost
accountant. Your assignment is to analyze the financial situations
described and make the appropriate reports and computations. Show all
calculations or calculator inputs for credit (Round to two digits after the
decimal point when necessary).
4.1 Apply your accounting skills on cost accounting
computation and analysis
Graded Project: Cost Accounting
READING ASSIGNMENT
Your project must be submitted as a Word document (.docx, .doc). Be sure that
each of your files contains the following information:
Your name
Your student ID numbe
The exam numbe
Your email address
To submit your graded project, follow these steps:
Cost Accounting (v2) : Lesson 4 : Page 1© 2019 Penn Foste
Inc.
Log in to your student portal.
Click on Take Exam next to the lesson you’re working on.
Find the exam number for your project at the top of the Project Upload
page.
Follow the instructions provided to complete your exam.
Be sure to keep a backup copy of any files you submit to the school!
Part 1: Job Costing
At the beginning of the month, Mark’s Masonry had two jobs in process
that had the following costs assigned from previous months:
Job Number Direct Labor Applied Overhead
JB111 $24,000 ?
JB115 $15,000 ?
During the month, Jobs JB111 and JB115 were completed but not billed
to customers. The completion costs for JB111 required $26,000 in direct
labor. For JB115, $75,000 in direct labor was used.
During the month, one new job, JB120, was started but not finished.
Total direct labor costs for all jobs amounted to $155,000 for the month.
Overhead in this company refers to the cost of work that is not directly
traced to particular jobs, including copying, printing, and travel costs to
meet with clients. Overhead is applied at a rate of 70 percent of direct
labor costs for this and previous periods. Actual overhead for the month
was $95,000.
Answer the following questions:
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a. What are the costs of Jobs JB111 and JB115 at (1) the beginning
of the month and (2) when completed?
. What is the cost of Job JB120 at the end of the month?
c. How much was under- or over-applied service overhead for the
month?
Part 2: Process Costing
Future Robotics provides the following information for one of its
department’s operations for June (no new material is added in
Department A):
WIP inventory -- Department A
Beginning inventory (20,000 units, 55% complete with respect to Department A
costs)
Transfe
ed-in costs (from Department Z) $110,000
Department A conversion costs 54,000
Cu
ent work (30,000 units started)
Prior department costs 275,000
Department A costs 210,000
The ending inventory has 4,000 units, which are 30 percent complete with
espect to Department A costs and 100 percent complete for prior department
costs.
Complete the following:
a. Prepare a production cost report using FIFO.
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Part 3: Activity-Based Costing
Banquet Services uses activity-based costing to compute the costs of
their catered parties. Each party is limited to 40 guests and requires five
people to serve and clean up. Two types of parties, an afternoon picnic
and an evening formal dinner, are offered. The
eakdown of the costs
follows:
Activities (and cost drivers) Afternoon Picnic Formal Dinne
Advertising (parties) $175 per party $100 per party
Planning (parties) $50 per party $75 per party
Renting equipment $75 per party plus $75 per party plus
(parties, guests) $20 per guest $20 per guest
Obtaining insurance (parties) $200 per party $400 per party
Serving (parties, servers) $60 per server per party $90 per server per party
Preparing food (guests) $20 per guest $30 per guest
Per party costs do not vary with the number of guests.
Complete the following:
a. Compute the cost of a 40-guest afternoon picnic.
. Compute the cost of a 40-guest evening formal dinner.
c. How much should Banquet Services charge per guest at a
minimum for both Afternoon Picnics and Formal Dinners to cove
their costs?
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Grading Criteria
The grading of this project is weighted as shown. The sum of the scores
for all three parts is the total score for the project.
Part 1: Job Costing (worth 30 points)
Part a 10 points
Part b 10 points
Part c 10 points
Part 2: Process Costing (worth 40 points)
Production Cost Report—FIFO
Formatting 10 points
Content 30 points
Part 3: Activity-Based Costing (worth 30 points
Part a 10 points
Part b 10 points
Part c 10 points
TOTAL 100 points
Cost Accounting (v2) : Lesson 4 : Page 5© 2019 Penn Foste
Inc.
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